What criteria must be met to create a binding oral boundary agreement?
Agreements between landowners fixing the position of a boundary that cannot be determined by reference to a transfer plan do not need to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989: Joyce v Rigolli [2004] EWCA Civ 79. This means that an oral agreement does not need to be reduced to writing and need not be signed by all the parties to it.
The ruling even applies to agreements that involve a conscious disposition of a trivial amount of land. The court explained that it wanted to encourage parties to resolve boundary disputes without resorting to litigation. In addition, it believed that it would be unrealistic to expect parties to execute a formal transfer of a small area of land because it would be difficult for them to define the precise extent of the land in question without incurring disproportionate expense.
How far does this rationale extend? While ruling on a boundary dispute in Abid v Nata Lee Ltd [2014] EWCA Civ 1652; [2014] PLSCS 361, the Court of Appeal highlighted the difference between an agreement, the purpose of which is to move a boundary, so as to transfer land from one neighbour to another, and an agreement the purpose of which is to define a previously unclear or uncertain boundary, even if that agreement may involve a conscious transfer of a trivial amount of land. The first type of agreement is subject to section 2, but the latter is not.
Agreements between landowners fixing the position of a boundary that cannot be determined by reference to a transfer plan do not need to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989: Joyce v Rigolli [2004] EWCA Civ 79. This means that an oral agreement does not need to be reduced to writing and need not be signed by all the parties to it.
The ruling even applies to agreements that involve a conscious disposition of a trivial amount of land. The court explained that it wanted to encourage parties to resolve boundary disputes without resorting to litigation. In addition, it believed that it would be unrealistic to expect parties to execute a formal transfer of a small area of land because it would be difficult for them to define the precise extent of the land in question without incurring disproportionate expense.
How far does this rationale extend? While ruling on a boundary dispute in Abid v Nata Lee Ltd [2014] EWCA Civ 1652; [2014] PLSCS 361, the Court of Appeal highlighted the difference between an agreement, the purpose of which is to move a boundary, so as to transfer land from one neighbour to another, and an agreement the purpose of which is to define a previously unclear or uncertain boundary, even if that agreement may involve a conscious transfer of a trivial amount of land. The first type of agreement is subject to section 2, but the latter is not.
There was no uncertainty about the boundary that was in dispute in this case. One of the witnesses had described the plan attached to the transfer that separated the adjoining properties as “one of the best I have seen in the last 10 years”. The court also doubted whether the agreement had been made for demarcation purposes, since it was pleaded as having been designed to vary, rather than demarcate, the existing boundary.
Another important factor was that the land that was supposed to have been transferred from one of the landowners to the other was not, in the context, trivial. The court accepted that a plot measuring some three metres by four metres might be trivial in the context of a field or a garden. However, an area of land of this size is of real significance in a busy urban setting where its acquisition will enable a landowner to combine it with his own land and obtain a car parking space.
The court added that it was also difficult to identify any consideration for the agreement to transfer the land that was in dispute. In a true boundary demarcation agreement, consideration moves between the parties, who both obtain certainty as to the extent of their properties and relief from the risk of a boundary dispute. However, there was no evidence that any consideration had been provided in this case – and, if none was given, that alone sufficed to deprive the agreement of its effect.
Consequently, the rules that except boundary agreements from the requirements of section 2 were not applicable in this case, with the result that the land in dispute continued to form part of the adjoining property.
Allyson Colby is a property law consultant
